This proposal is testing the following hypothesis: Alk3-Smad1 signaling mediates BMP4 regulation of mouse lung development possibly through a novel WIF-1/Wnt mechanism. Experiments are therefore designed with three specific aims: Aim 1. To determine the in vivo function of BMP type I receptor Alk3 in mouse embryonic lung development by abrogation of Alk3 function in lung epithelial cells at different developmental stages. Lung epithelia specific Alk3 conditional gene knockout will be achieved by doxycycline-induced Cre expression in mice crossbred from floxed Alk3 and SPC-rtTA/TetO-Cre transgenic mice at different developmental stages. The specific regulatory function of Alk3 in lung development will then be determined by analyzing dynamic changes of lung morphology, cell proliferation and differentiation, and gene expression. Aim 2. To determine the in vivo function of BMP-specific downstream Smad1 in mouse embryonic lung development by abrogating Smad1 function in lung epithelial cells at different developmental stages. Smad1 function in lung epithelia will be abrogated in mice crossbred from floxed Smad1 and SPC-rtTA/TetO-Cre transgenic mice by doxycycline induction from different developmental stages. As in the Alk3 study, dynamic changes of lung morphology, cell and molecular biology will be characterized to determine the function of Smad1 in overall lung development. Aim 3. To determine the mechanism of Alk3-Smad1 induced Wnt inhibitory factor-1 in controlling distal lung epithelial cell differentiation. Our preliminary study found that WIF-1 expression was downregulated in both Alk3 and Smad 1 knockout mouse lungs at E18.5. Thus, the relationship between WIF-1 expression/Wnt canonical pathway activation and BMP regulated distal lung epithelial cell differentiation will be determined by comparison of Alk3 or Smad1 knockout and control mouse lungs at late gestation stages. Transcriptional regulatory mechanisms of WIF-1 by BMP-Smad activation will be further dissected in cultured lung epithelial cells. Furthermore, the mechanisms by which BMP-Smad signaling regulated lung epithelial cell changes through WIF-1-mediated downregulation of Wnt/beta-catenin pathway will be determined in cultured cells. Relevance to human health: Blocking intracellular BMP signaling in mouse lung results in immediate neonatal lethality due to failure of air breathing. These studies will provide fundamental knowledge about BMP intracellular signaling in lung development and pulmonary diseases, which will help us to understand congenital and neonatal disease as well as lung injury repair. This basic information may aid in the future design of novel therapeutic strategies to prevent and treat developmental pulmonary diseases.